As CCP, NCC assumes risks incurred under the transactions concluded bymembers duringtrading, acting as intermediary between the parties: i.e. as the seller for each buyer and as the buyer for each seller,so that replacing their contractual relations between each other with relevant contracts with the central counterparty.

NCC’s main and most important function is to maintain stability in the serviced financial market segments through implementation of the state-of-the-art risk management system conforming to the international standards and provision to the participants of such clearing services which would enable efficient use of the allocated funds.

The transfer of the clearing function to NCC, founded for this particular purpose, became an important step in the Group’s development, as well as in development of all Russian financial market infrastructure, for it enabledseparation e ofclearing institution risksfrom the exchange risks by relocating the latter to a highly capitalized clearing Bank.

NCC’s banking license enables it to significantly improve reliability and efficiency of Group’s clearing and settlement system, because, as a Bank, NCC, on the one hand, is subject to a strict regulation and supervision from the Bank of Russia, and, on the other hand, it can access the Central Bank’s refinancing instruments and obtain interbank market funds.

By using services rendered by NCC as clearing organization and CCP, the Group's market members are provided with a number of extra benefits:

· NCC guarantees performance of obligations to each non-defaulting member under the transactions concluded with the latter, irrespectively of how other market members perform their obligations.

· NCC spares participants from the need to assess risks and set limits to each other, since the members only have to assess their risks assumed to NCC as CCP.

· NCC’s clearing service with partial margin posting, as well as the netting performed by the Bank, enable the members to use their funds more efficiently and cut transaction costs.

The assignment of the status of a qualifying central counterparty to NCC by Bank of Russia in 2013 enables the Russian clearing members – credit institutions to decrease capital requirements both for the trades with NCC and for the collateral posted on the accounts opened with NCC. In 2014, the Bank of Russia also assigned NCC the status of a systemically important central counterparty.

NCC’s strategic objective is to provide the members of various financial market segments with integrated clearing services implying the use of a single margin and single positions (limits) of the members in course of servicing the latter in all Group's exchange-based markets and over-the-counter markets.

Since 2009, NCC has been the member of the European Association of Central Counterparty Clearing Houses (EACH), and since 2011 – member of the Global Association of Central Counterparties – CCP12. Its membership in these associations demonstrates appreciation of conformity of NCC’s performance to the international standards and recognition of the success achieved by Moscow Exchange Group in developing the exchange infrastructure.